In the Footsteps of Mr. Kurtz (21 page)

There is something
rather touching about the figure of the late Erwin Blumenthal, the German banker who briefly tried to put Zaire's finances in order and found the experience so terrifying, the rules of the game so far beyond anything he had hitherto encountered, he ended up sleeping with a pistol under a pillow, braced for imminent assassination.

In the Washington institutions he passed through, he does not seem to have left many friends behind. Describing him, ‘cantankerous', ‘punctilious' and ‘prudent' were the adjectives that sprang to the lips of former colleagues. ‘He was a petty bureaucrat, and petty is one thing Zaireans have never been,' sniffed one. ‘He was used to the clockwork efficiency of the Bundesbank and just couldn't adapt to Africa,' was another's assessment. Most damning of all: ‘He was very, VERY German.'

No, Blumenthal was definitely not the stuff from which heroes are made. But that very Prussian meticulousness, wrapped in a thick layer of obstinacy, was what allowed him to leave his small mark on history. This bureaucrat who so got on everyone's nerves managed to pull off a double
coup
. Not only did he expose to public view the financial machinations of Mobutu and his ‘Big Vegetables'. Far more significantly, he made it impossible for the West to ever pretend it was not aware of what was going on, bringing it face to face with its own hypocrisy.

As the years passed and Zaire was progressively pauperised, the
bystander might be forgiven for concluding that the outside world was being kept in blissful ignorance of Mobutu's venality. How else to explain the level of aid the country continued to enjoy? Between the start of the Zairean economic crisis in 1975 and Mobutu's departure in 1997, Zaire received a total of $9.3 billion in foreign aid. Between 1975 and 1984 the sums averaged $331 million a year, rising to an annual $542 million from 1985 to 1994.

Leading the way were the International Monetary Fund and the World Bank, the two institutions whose charters were first drawn up in 1944 with the backing of President Franklin Roosevelt, who was convinced that financial crashes, economic depressions and currency disorders lay at the heart of two world wars and that free trade, reconstruction and the development of backward economies were the keys to international peace.

Since their beginnings at a hotel at Bretton Woods, New Hampshire, these two institutions have come to play a crucial—and controversial—role as ‘catalyst' lenders in the Third World. The amount of money they themselves lend may be quite small, but as a symbolic vote of confidence, a World Bank or IMF agreement is the signal governments and commercial banks look for before going in.

Given that the World Bank and IMF remained on working terms with Mobutu from soon after his takeover until the early 1990s, despite the repeated failure of the economic stabilisation programmes launched in Zaire, the natural assumption might be that they were unaware of the ghastly truth throughout these years. In fact Mobutu's foreign financial backers knew all too well what was going on. If the surreal anecdotes of expatriate businessmen, the press accounts of the president chartering Concorde to take his family to Disneyland were not enough, their own staff had been warning them for decades of what was happening, as the report drawn up by Blumenthal made clear.

Despite his colleagues' dismissive comments, Blumenthal was by no means a newcomer to Africa when he was sent by the IMF to take up the post of director of Zaire's central bank in 1978. He had worked in Tanzania and acted as adviser to Moise Tshombe, the
Katangan secession leader who briefly served as prime minister. But it was fourteen years running the Foreign Affairs section at Germany's central bank that marked him out as a likely steady hand on Zaire's erratic tiller.

Nominally, the dispatching by the IMF and World Bank of foreign advisers to work inside key institutions is justified on the grounds that weak, post-colonial administrations lack technical expertise. In Zaire's case, the placing of experts in the central bank, customs service and Finance Ministry betrayed concern over the leakages that risked sabotaging all attempts to revive the economy.

Blumenthal lasted only until 1979 before giving up. He did not immediately rush into print—as director of the central bank, he was bound by professional confidentiality. But three years after his abrupt departure an institution attached to a creditor government asked him to assess the likelihood of Zaire repaying its foreign debts—by then a crippling $5 billion. The report he produced is an idiosyncratic piece of work. Written for internal consumption and mercifully devoid of the diplomatic circumlocutions normally used in World Bank and IMF publications to skirt such unmentionables as ‘graft' and ‘sleaze', it attempts neutrality, only to lapse into fury. It has the freshness that comes of the release of pent-up exasperation.

Despite massive external assistance, Blumenthal begins, all Zaire's indicators show a disastrous five-year slide. Given this fact, he asks, why do the IMF and foreign donors insist on renewing their loan agreements? In theory, he acknowledges, with its extraordinary reserves and a president ready to promise to meet IMF conditions, Zaire is an investor's dream. But that is to ignore the only thing that really matters, he warns: ‘There has been—and there still is—one single major obstacle wiping out all prospects: the corruption of the team in power.'

He provides a random list of incidents that occurred during a posting which, ironically, coincided with what Mobutu declared ‘The Year of Raising Morality': furious showdowns with generals, gun-waving soldiers and government officials demanding tens of thousands of dollars (in cash, of course); the realisation the Bank of Zaire's
accounts abroad had first been plundered and then falsified; and, finally, the discovery of ‘special accounts' opened by the central bank in Brussels, Frankfurt, Geneva and London in the president's name which, surprise, surprise, never featured in official records.

The report is not without a certain accidental humour. Blumenthal, the professional whose word is his bond, was flummoxed by Mobutu's capacity to tell the most outrageous lies without pausing for breath. You can sense the hilarity that must have exploded in the presidential palace after each of his worthy, pompous remonstrations over yet another monstrous presidential fib.

With the president's blessing, Blumenthal puts Mobutu's uncle, who has run up massive debts, on a banking blacklist. A few weeks later the central bank pays the uncle $50,000 in cash, blacklist or no blacklist. Mobutu agrees that a massive salary being paid a university professor in Belgium should be slashed, only to quietly restore payments to the man, who happens to be his son's guardian. Best of all are Mobutu's sympathetic noises, his regret, his reprimanding of the central bank governor, when Blumenthal leaves, overwhelmed by the president's quiet sabotaging of his work. ‘What an actor!' marvels Blumenthal in his report.

And that is his main point. The corruption in Zaire, he argues, is not a generalised blight, a plague without face or source. Mobutu, he argues, is too feared, too powerful for his minions to be taking these actions without his approval. Yet—you can almost feel his blood pressure rising—the IMF and World Bank were still giving Mobutu's reform plans serious consideration at the start of the eighties, despite the fact that he had kept them scrupulously informed of what was happening. ‘None of the Fund and World Bank Officials can be unaware that any attempt at strict budgetary control comes up against a major obstacle: the presidency!' he fumes. ‘Any monitoring of the presidency's financial transactions proves impossible. In that office, no difference is made between state expenses and personal requirements. How can the international institutions and Western governments still be putting blind trust in President Mobutu?'

He reaches a final, depressed conclusion: ‘There will certainly be new promises from Mobutu and the members of his government and the ever-growing foreign debt will be rescheduled. But there is no—I repeat no—chance on the horizon that Zaire's many creditors will recover their funds.'

Blumenthal's devastating finale was an appendix in which he listed questions and answers put to Nguz Karl i Bond, the former prime minister who had gone into exile. Nguz was later to throw his hand in with the president once again, in one of those political U-turns Mobutu so excelled at masterminding, but at this stage of his life he was in denunciatory mode. He helpfully details embezzled funds, confirms the existence of a bevy of presidential accounts in foreign banks, explains the method Mobutu used to take a cut on sales of cobalt and copper sales, and lists known presidential properties in France, Belgium, Switzerland, Italy and Africa.

But the last pages were the most embarrassing for the foreign allies, because they give a hint of how thoroughly Mobutu, who probably spent more than any other African leader on press relations firms, well-placed political ‘friends' and lobbyists in the key Western capitals, had used his wealth to buy support abroad. Nguz names top Belgian civil servants, politicians and journalists on Mobutu's payroll. Former French president Valéry Giscard d'Estaing was among those to benefit from Mobutu's largesse, he claims, which came in the form of diamonds for his wife and priority debt repayment for the French companies in which Giscard d'Estaing's family had an interest.

The report was too juicy not to be leaked: whether this was done with or without Blumenthal's approval is not clear. In the mood of collective amnesia that has developed around the whole episode, IMF and World Bank officials are now wont to play down its significance. ‘Oh, there was nothing in it we didn't already know,' one told me. ‘In any case, what he mentioned was a fraction of what was really going on,' said another.

But the reason the report was significant was not so much because of the information it contained, but because it ended the
cosy arrangement in which the Zaireans knew that the international financiers knew, and the financiers knew that the Zaireans knew that they knew, but everyone could carry on playing the game of credits, conditions, targets and stand-by arrangements with apparent innocence. ‘It was a bombshell,' acknowledged one World Bank official. ‘The report came out just before we were due to meet a Zairean delegation and I wanted to crawl under the table. I couldn't look them in the eye. What could you say to them after that?'

Bizarrely, Mobutu himself appeared to have played a part in ensuring the report was widely circulated, ordering an emissary to hand a copy over to the Belgian Foreign Minister. One African newsletter speculated at the time that the president was using the report as a form of moral blackmail: too many top Western officials had been complicit in his system, he was effectively telling the international community, for them to stop lending now. Whatever his calculations, his arrogant assumption that funding would continue proved correct, despite the odd hiccup. By the time of the report there had already been four failed IMF stabilisation plans. But the rescheduling of Zaire's debt went on—nine times between 1976 and 1989. It was only in 1990 that the World Bank finally cut off programme funding to Zaire, to be followed soon after by the IMF and bilateral donors.

After Blumenthal's report, there was to be a wearying succession of threats, pleas and pressure on the one side and broken promises, procrastination and bad faith on the other. It was to take eight long years before the two institutions finally reached the same conclusion as the testy German banker had spelled out in 1982: money was not the answer to Zaire's ills, rather, it lay at their very root.

 

You know when
you are entering Bretton Woods land in Washington from the badges. As you approach the cross-section of Pennsylvania Avenue and 18th Street, the men in elegant suits begin to look more cosmopolitan. Skin colours change and you start picking up snatches
of conversation in French, Russian, Swahili. But the real give-away are the passes, usually dangling from a metal chain—their ticket into the inner sanctums of the two institutions Roosevelt believed could change the world.

Sandstone brown and tucked discreetly on a side street, the IMF is the smaller of the two, its innards an ugly maze of yellow corridors and small offices. Its staff used to work inside the World Bank building, but were squeezed out as that institution mushroomed, spilling beyond the vast grey-white block to take over a bevy of adjoining tower blocks.

Peeking into the light-filled atrium of the main building, where the fountains drowned out the multilingual babble, I was glad the World Bank, at least, had a certain architectural grandeur. Having worked in so many African countries where its dictums were a matter of life and death to residents, I did not want to be palmed off with some anonymous office block. For the sake of those whose lives had been forever altered, a little magnificence seemed in order.

Recreating how the two organisations acted in Zaire, trying to establish exactly why they chose to ignore their own emissary, should have been easy, but it was not. Under James Wolfensohn, the Australian private banker who assumed the World Bank presidency in 1995 pledging to increase transparency and accountability, country assessments once jealously guarded by World Bank representatives are supposed to be open to the public. But it is unclear whether the new openness applies retroactively. In any case, headquarters in Washington only hold documentation for recent years. Studies dating back a decade or so would have to be unearthed from archives in Pennsylvania and transferred, I was told. That would require authorisation. It was never granted.

So, talking on the apartment balconies or in the neat gardens with the officials who had fallen in love with Zaire, jousted with Mobutu, and finally left with a despairing shrug of the shoulders, it was a question of trying to pull together a spray of scattered personal recollections dating back ten, fifteen, twenty years: an anecdote here,
an incident there. The dates did not always match up—memories are selective things—but there were enough consistencies to form a rough picture of the post-Blumenthal era.